Nasdaq trading resumes after technical glitch

(USA TODAY) -- Nasdaq was reopening trading Thursday afternoon after trading
in all Nasdaq-listed stocks and options was halted for more than three
hours due to an unknown technical glitch.

The highly
unusual shutdown did not appear to be caused by a computer hacking
incident, according to a federal law enforcement official who did not
want to be named because he was not authorized to speak publicly on the
matter.

Shortly before 2:30 p.m. EDT, Nasdaq
announced that it intended to re-open stock trading at 3:25 p.m. EDT.
All stock quotes had been cleared, according to the exchange, which also
said customers who wished to cancel their orders may do so.

Customers
who don't want to participate in the reopening should cancel their
orders prior to the resumption of of trading, Nasdaq said.

Options trading was scheduled to resume at 3:35 p.m. EDT, the exchange said.

The
glitch struck shortly after noon East Coast time. Citing an issue
involving electronic quote dissemination, the Nasdaq exchange announced
at 12:14 p.m. it was "halting trading in all Tape C securities until
further notice."

The exchange announced it had halted options
trading at 12:28 p.m. and said firms needing assistance canceling orders
should contact market operations.

Trading in all stocks listed on
the New York Stock Exchange and the NYSEMKT exchange "continue business
as usual," spokesman Rich Adamonis said earlier Tuesday afternoon.

"This is a very big problem. It's the flash freeze," says Sal Arnuk, a trader at Themis Trading in New Jersey.

The
problems are connected with the Security Information Processor, a
system that collects stock prices used by the public, Arnuk says. "This
is a very big issue. The markets are broken."

John Nester, a
Securities and Exchange Commission spokesman, said "we are monitoring
the situation and are in close contact with the exchanges."

There
were no immediate signs of problems on other markets, said Michael Farr
of Farr Miller & Washington, an investment management firm in
Washington, D.C. "You're not seeing a breakdown in bond, gold not going
through the roof. Right now the market seems to be taking it very much
in stride."

"It's all going to hinge on the cause," said Farr. "If
we find out this proes to be hacking or cyberterrorism, then you could
see all three markets drop."

Some traders seemed relieved that
trading volume has been light, as that could reduce the impact of the
outage. But the danger is how the system will react when all the
cancelled orders are released when the system comes back up, Arnuk says.
"It's almost unpredictable what will happen in the market," he says.

But Thomas Peterffy, head of Interactive Brokers Group, an online discount brokerage, called the trading halt "inexcusable."

"The
purpose of multiple exchanges is to have a more robust market system in
which if any participant must go out, the system will continue to
function," said Peterffy, who added that the shutdown "has a huge cost."

It's
the latest black eye for the nation's financial exchanges. Investors
are still vexed by the Flash Crash of May 6, 2010 when the value of the
Dow Jones industrial average crashed more than 1,000 points over a
period of about 15 minutes.

And it's another embarrassment for
Nasdaq, which was widely panned for trading problems and delays with the
initial public offering of social networking stock Facebook last year.